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Analyzing slowdown and meltdowns in the African countries: New evidence using Fourier quantile unit root test

Yi-Lung Lee, Omid Ranjbar, Fateme Jahangard and Tsangyao Chang ()

International Review of Economics & Finance, 2020, vol. 65, issue C, 187-198

Abstract: In this paper, we analyze growth dynamics in the 25 African countries over the period 1950–2016. To this end, first, we test the stochastic properties of real per capita GDP series. While conventional unit root and standard quantile unit root tests do not reject a unit root, using a novel quantile unit root test which allows for smooth breaks, we could find the results in favor of trend stationarity of 16 out of 25 real per capita GDP series. Our results indicate that in some countries positive shocks to real per capita GDP series have permanent effect and in some of them, the negative shocks. Whereas all of African countries in our sample specialized in producing and exporting primary products, hence to have favorable growth performance, they have to manage terms of trade shocks to avoid large swings in the real per capita GDP.

Keywords: GDP per capita; Unit root; Quantile regression; Fourier expansion; Smooth breaks; Africa (search for similar items in EconPapers)
JEL-codes: C22 O47 O55 (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1016/j.iref.2019.10.008

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